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Book TV After Words

Donald Bartlett & James Steele Education. (2012) 'The Betrayal of the American Dream.'

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Us 11, America 9, U.s. 8, China 5, Nebraska 5, Rubbermaid 4, Ohio 3, India 3, Washington 3, Adam Smith 3, Don 2, United States 2, Romney 2, Southwest Florida 2, Obama 2, Bob Woodward 1, Lincoln 1, James Steele 1, Bob Greene 1, Juan Williams 1,
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  CSPAN    Book TV After Words    Donald Bartlett & James Steele  Education.   
   (2012) 'The Betrayal of the American Dream.'  

    September 2, 2012
    9:00 - 10:00pm EDT  

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ohio generally demographically is a sort of the average state. almost every demographic group you can think of is well represented here. catholics, protestants, fundamentalists, mainstream protestants, various ethnic groups. the only group that isn't well represented here probably even though there is a growing hispanic population there are some places in the state where there is a fairly significant concentration of hispanics so there is an infusion but they don't really amount to much in terms of the overall significance of their voting patterns and the elections. demographically it is almost as if you want to test the consumer product unit test in ohio because you have got every demographic slice the you want and of course ohio also is a big swing state. the large rural areas with low populations but most ohioans
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live in big cities. big cities and their suburbs. .. >> candidates will be coming here saying i have to win ohio to win the presidency. both of the candidates this year probably have to win ohio. they will go at it hammer and tongs in ohio, spend a lot of
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money and be here a lot. >> for more information on booktv's recent visit to columbus, ohio and other cities on c-span's local content vehicle tour, go to c-span.org/localcontent. up next, "after words" with juan williams. this week, the pulitzer prize winning journalism team and their latest book, "the betrayal of the american dream" best selling authors detail dismantling of the middle class through washington deregulation and wall street speculation. >> host: don bartlett and james steele are the author of "the american dream," and you are a team of investigative reporters as honored as any, bob
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woodward, former colleague at the post, speaks highly of you. your peers celebrate you, winning two pulitzers, national magazine awards. plight sers for auditing the irs going after the how ways and means committee in terms of tax loopholes given to big business. you've won six george pope awards. you're in a line of a great tradition of american for what people in the old days called muckrakers, but today you're called investigative reporters. investigative reporters is a craft that's in decline. we went through a fallow period, the 20th century, people like lincoln and stevens, and then you come forward to the 60s, and now you see more of the kind of critical, you know, intellectual
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consciousness emerge on the american press. there's a market for stories that dig in, and you get people like halvorstin. >> bob greene of news day and all of the great investigative reporterring teams he put together for regional, national, and international pieces. he was a trend setter looking at the big issues facing us, not just the small ones, and so greene set the pace for really an awful lot of our business at the time. >> guest: it was not a wide spread occupation, let's put it that way. the "new york times" basically did very little. you know, you had a massacre -- >> host: i was thinking that when you said that. >> guest: that would have been a logical place for it, but didn't go there. went to a little news service and little papers around the
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country. >> host: didn't he do that in >> guest: no, that was seymour. >> host: at the times, wasn't he? >> no. >> guest: no, later he was. >> guest: later he was. he was late in coming to invest good reporting. people don't think about that >> host: why do we have so little investigative reporting today? economic problems setting the nation's newspapers? >> guest: a lot are economics because news staffs everywhere have been dramatically reduced. it's also, as don was suggesting, you don't always find many newspaper editors from any era embracing investigative reporting. what we have seen is not just economics, but the discomfort this reporting causes in a news room because it's troublesome. it's that more than the economics. i mean if you're going to ruffle feathers of somebody powerful,
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that gets those people running in to complain to the publisher, and stories are legion over the years of those stories happening. we are fortunate throughout the 70s and really almost all of our career to work for people who were really strong and upright in that area, and just let the chips fall where they may, where the work led you. >> host: you were fortunate, and i think you've done a lot. obviously; you have been greatly hop norred by the -- hon dored by the peers in the craft of journalism, and in this book, you're back to attacking the rich, and i want to say the heart and soul of the book is it's your premise that tens of millions of middle class americans and working poor people lost out, and that for them, the american dream is over right now, today, and you argue that the reasons for this is that there's too much power and influence in the hands of the very rich in american society, and when i'm looking at this,
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i'm thinking to myself people are going to say, well, these guys are basically anti-romney, class warfare advocates for the democrats, that you are beating up on the rich, when, in fact, they would argue the rich are people who create and you think back to what bill clinton and corey booker and senator schumer said after there was criticism of the folks on wall street. they said they are good folks, make contributions, they've done so much in our communities. don, are you, in fact, the class warrior? >> guest: you know, this class warfare thing, i don't know where it's coming from. this country was founded on class warfare. that's why people came here. they didn't want the british system. what we have is the british system now. >> host: why do you say that? >> guest: a few people at the top control everything. >> guest: a financial arian
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rise toke sigh. >> host: you call it a -- >> guest: we were just quoting a memo that a wall street investor used to describe what the united states became using the word "plutonamy." that's less -- let's say excitable word, but his point was, there are a few plutonamy's around the world and its cakessed by a tremendous amount of wealth at the top and a wealth that's greater than the bottom 90%. that's what he used. he said that's who will buy product and who drives the economy and the middle class is just not as important as it was. >> host: for people who make less than $200,000 they don't count. >> guest: they are irrelevant
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in the eyes of the hedge fund people. these are hedge fund people talking. you can understand where they are coming from. the middle class dwarfs the middle class in india, brazil, you name it. it's why they say the u.s. is irrelevant in that sense. >> guest: they are always looking for growth. that's the heart of the whole financial movement. they want growth. they want growth in stocks. they want the companies that have the multinational connections and operations and revenue streams. that's where they want growth. that's why they see the middle class of china and india in particular as representing that growth. that's the whole heart of things. whereas in the u.s., more stable now, and the folks at the bottom don't have the money to buy like they once did. >> host: you know, when president obama says something of this type publicly, he's castigated said to be attacking people who create wealth in
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america, and it's said when he said you didn't build it that the larger society contributed the legal structure, the bridges, the roads, he is said to be demeaning small business owners in america, would you agree or disagree? >> guest: no, absolutely not. he's absolutely right. it could have been phrased more elegantly, perhaps, but he's absolutely right. that's like us saying we did this ourselves. we didn't. we had all kinds of help. the idea that one person or two people do everything -- the best example is steve jobs and apple. apple derived enormous ben facilities from the advanced research project agency that really started the interpret. it was not al gore. does he pay tribute to that? absolutely not. there's this perception that one or two people did everything.
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the president was right of the he didn't phrase it right, but everybody has a lot of help. >> guest: we have a statistic in the book that the test goes to the heart of the question. the mid-50s, the richest americans, and that's been a group that's been tracked by irs for decades, the 400 richest, and in the mid-50s, paid 51% of the income in federal taxes. by 2007 on on the eve of the met down, they pay 16%. i mean, this just didn't happen overnight. this was not a hurricane that just blew through. this was public policy driven systematically over the years contributing to the inequity, the imbalance, and it's also why so many people at the bottom don't have the money they once did. >> host: well, you write in the book that two-thirds of the nation's total income between 2002 and 2007 went to the top
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1%, and this is an incredible reality, but then you asked the question, i think rhetorically, people wonder where did the jobs go? how is this possible? why is there so much money going to the rich? the answer comes back to, in your mind, these hedge funds, these rich folks, who have been enriching themselves, but you say fails the american middle class and failing the american worker. what's interesting to me is you go after people who most would not view as conservatives, people like tom friedman in the "new york times" who says global trade is a good thing. you say global trade is not a good thing. okay. why is global trade a bad thing? i know adam smith is in heaven frowning on you two, but why is global trade a bad thing? >> guest: actually, adam smith is probably not frowning as much as someone like tom freed mapp would think. if you read adam smith, which we
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have, and we get e-mails from time to time, and if you read "wealth of nations" you'd understand, but smith was skeptical of corporate power thinking everything would be kept in check by competition. he had no way of envisioning the multinational corporations we had now that are just overridden. what we say what global trade, free trade, global trade, that's fine, excellent, a wonderful idea, but we say the way we practice it is off kilter. >> host: what's the problem? >> guest: the problem is we opened doors that other countries have not opened their doors. this has been true of the main trading partners in europe, asia, particularly japan, and then you have the new player on the market, china, not only not opening doors to certain american products, but subsidizes, provides all incentives to their companies, government founded companies in many areas, that make it impossible to compete with those
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companies within on a normal economic playing field. we need to face that. >> host: listening to you, i say, oh, the problem is japan, it's china, these other countries, but in reading the book, then, what it comes across is it's u.s. politicians who have been bought by the very rich in this country, the people who run the multinationals, who run the hedge funds who say don't put in place any kind of protections for the american worker or the american middle class, and allow the other countries to compete up fairly, but why are our politicians doing that and seeking to decimate our own middle class? >> guest: greed. >> host: why would the middle class cooperate? >> guest: that's the $64,000 question. >> guest: we've come to the conclusion that a lot of it is simply propganda. there's always a propaganda bhil about free trade. the minute any barriers are suggested, any kind of get-tough measures, everybody says, oh, my
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gosh, you can't throw up walls around the country. we make the point in the book, this is not an either/or situation. we need to, in some cases, enforce tougher trade policies to send a message, but right nowings we never get tough, and as a result of that, all of our trading partners realize they can do what they want, and our multinational corporations send products offshore, bring them this, bring them in without duty. there's absolutely no penalty in any way from growing, but you're absolutely right, it's getting back to the politicians and public policy. we have not had the nerve to put that in place. >> guest: yeah. you know, there's a zillion prizes. we reward you if you do this or that. there's no stick. absolutely no stick whatsoever in terms of trade, and so that happens, and there's kind of a fear put in corporations that if you do this, you're going to pay a penalty. classic example.
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there's about 2 trillion sitting offshore, you know, profits made offshore. >> host: corporate profits? american corporations? >> guest: american corporations, bring it back, it would be tax. the argument with big business is, well, we made the money offshore. not true. some was, some was made here and shipped offshore, some was made offshore, but the point is that money should be taxed for no other reason that they already got writeoffs in the tax returns for the way that money was spent, and the money that generated the profits was spent. if you're going to profit from it, you really should be paying taxes on it. there's nothing that says if you don't bring that money back, here's what's going to happen to you. that's what's missing from this. there is no penalty. this is not rocket science. you can just very easily say, you know, the classic case now
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is they have it sitting there, and they've offered to pay 4% or 5%. can you imagine going into irs saying, here's what i'm going to pay you this year and just give me a pass on this, give me 5%. ain't going to happen. multinational corporations, it happens every day, and it is just as dishonest as it gets, period. >> guest: the point is so true in this case. you talk about no stick, back in 2003, congress sort of succumb to the argument we have all of this money, corporations got this money sitting offshore, let us bring it back, pay kind of a token tax here, and the whole purpose of it was supposedly to create jobs. later, reports have disclosed that the companies that brought back the most money cut jobs afterwards, did not actually create jobs. that gets to the part that, yes, you even when put in place, there's no follow-up to enforce to some way or another level penalty on
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those. >> host: to bring this back to a human level and politics because we're in the midst of a political campaign, you talk about how the rich view money and taxes and a dollar bill differently than working in middle class america, that for them there's capital gains, and they pay a lesser tax on capital gains. they pay a lesser tax rate on dividends, on unearned income, and then they pay a lesser tax rate on something called carried interest for the hedge fund. >> guest: right. >> host: you point out that mitt romney who said recently he paid 13% -- he said that, by the way, i use the word "only" as a modifier, but he says i paid 13%, it's unfair for the people to say i didn't pay taxes. that's just untrue. i was truck by the idea that 13% is less than what i pay in taxes. you're making the point that for most americans that don't have,
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you know, mitt romney's income was $42 million, i believe, that this is unfair, but, again, the power of the rich to control the politician, and then to also control the think tanks who all tell us that we are engaged in class warfare for being critical of this. >> guest: over and over they say that. >> host: let me throw something, and i don't mean to interrupt, but i remember covering the republican primaries, and the point was made repeatedly that, i believe it's close to half of all of the taxes paid in this country are paid by the so-called 1%, that these people are paying the taxes, and that the rest of the country is not paying. there's a huge percentage of the country that pays no taxes. you don't talk about that. >> guest: well, the reason they pay the taxes is the same reason that willie robbed banks. it's where the money is. >> host: what do you mean? >> guest: the rich have all the money now. >> host: so they should be
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paying taxes? >> guest: they always paid more taxes. >> host: not because they are more creative, harder working, more virtuous in terms of putting themselves on the line and accept risk in order to achieve their dreams? >> guest: some may well fall into the category. we're not disputing that. the world is filled with all kinds of creative people who made a lot of money, and there's no problem with that. i think the problem we're saying is that this is out of balance from the way it used to be in the country where the rich did used to pay more than they do now, and the average person has no idea, i think, in many cases how much those tax rates have dropped, the effective tax rates dropped for those in the past. the ones mentioned a second ago on dividend income is a perfect example. the tax on dividends was at least what it was if you were a biochemist or a salesman or tool and dye maker who made a good living, whatever it was, that end of the income dividends tacked at that rate.
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2003 comes in, that rate is slashed to 15%. that was the first time ever. this was a monumental tax break to the very, very rich because when you look at tax returns, you look at irs data, the number of people who get dividends, significant money, is right at the top, the 1% or 2% of the population. yes, does everybody get a few dividends and everybody happy to get 15% tax? yes. who benefits from that? a tiny, tiny number of people. that never happened before 2003. that rate had always been pretty much the same as your earned income, your salary if you will. >> host: well, how did it happen? >> guest: well, it was put through as part of the bush tax cuts in 2003. there were earlier ones. the idea was -- >> host: i didn't mean the process so much as why would politicians who should be representing the middle class -- >> guest: they don't. let's get that straight. they do not represent the middle class. middle class doesn't give them their campaign contributions.
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that's not where the money comes from. they are beholding to the people who give them the money, and that's why they line up behind the hedge funds. private equity funds. >> host: if you talk to people involved with the tea party, if you talk to people who are working class white american -- >> guest: now you're getting into -- >> host: they line up with the folks saying we believe in american virtue and hard work and sacrifice and risk taking and the small businessman, and why are bartlett and steele here hammering on them? >> guest: one of the great myths of the people is when tax rates were high, people didn't work. this is one of the great enduring myths of the whole theory. go back to the 1950s when tax rates on people's earnings, last of the earnings, the tax rate was 92%. nobody paid 92%, but the effective rate was substantially higher than it is now. with the 1950s a time of people not working, where you were
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successful, but you didn't want to go do anything. complete bull. people worked as hard as they ever did. the country was economically strong at that time. if you don't like taxes, if you think you'll be in the bracket one of these days, you will advocate that course, but that's not the way it used to be, and all we're saying is that the very, very wealthy can afford to pay more, and wealthy folks acknowledge that, but the bulk of them are through programs that cut taxes. >> host: don, i was really curious about then, well, why do you think the tea party folks, especially older, white republicans, american, say we identify with the goal of what you call the plutocrats? >> guest: great question. this is me personally. i saw a series of brain scans to see if we can see beyond what's going on here. i don't know. it doesn't make any sense
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whatsoever. first of all, we've had this system now for the last couple of years. that's not created any jobs at all. it eliminated jobs. >> host: they blame president obama for that. they say that his stimulus spending, and by the way, at the end of your book, you advise that one of the solutions for this is increase government spending on infrastructure and the like. it sounds, again, right out of the obama playbook, but that's what upsets so many working class and middle class people that you say you're speaking for. >> guest: right, right. >> guest: they are deluded on the issue of the deficit. we make this point clear. this is not the time to be worried about the federal deficit. is the federal deficit a problem. it is. we don't dispute that. we have to look at that. right now, we need to spend money. i mean, the deficit hawks, where would they have been in 1942 after pearl harbor? a general says i need 100,000
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tanks. what would they say? i'll give you 10,000. the air force needs a thousand bombers. we'll give you 150. that's the mentality now. we need spending, not just a short term stimulus plan. we need a long term investment in infrastructure, not just highways and pipelines and electric lines, technology, a whole range of things. we have to look to the long range to create good paying jobs, and yet with the deficit mind set, nobody wants to spend a dime. right now, that's wrong. >> host: again, what i'm telling you is there are people, especially older americans, tea party types, who are saying, you know what? i don't agree. i think we should be encouraging initiatives. you know that, in fact, when president obama says that he wants to spend more in terms of education, health care, and the like, that these people say he is the entitlement president, the welfare president. you understand what i'm saying.
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>> guest: i understand. >> guest: food stamps have gone up, but for the first time ever, the majority of the recipients, highest number of recipients collecting it are employed. they make little money, they can't get by on that. >> host: you argue if there's growth in occupations for the middle class in this country, are basically in service occupations, things like retail clerks, customer service, child care, guards, security guards. >> guest: all the jobs that don't pay anything. >> host: low paying jobs? >> guest: yep. >> host: somehow you get this political support. >> guest: we think in part a lot of it is propaganda, the think tanks that continually rail against deficit spending. a lot is part of the media. a lot of the media, and here we are, this is our business, we shouldn't bite the hand, but the
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media succumbs to the arguments portraying these things as two sides of the coin, but the fact of the matter is a lot of people, a lot of middle class people who bought into the arguments, 24 is not in their best interest, and until they see that, i mean, things may change. the fact of the matter is that the country is divided on these issues. a lot are not voting their interests, but many are, and you'll see increasingly a number of people who realize that we're not creating good jobs this this country. >> host: this reminds me of the book "what's the matter with kansas?" >> guest: absolutely. >> host: also, you're critical of the political class, but you're also critical of the prosecutors. for example, when you look back at the collapse of the american economy back in 2007-2008, you point out none of these wall street people went to jail. >> guest: no. >> host: now here you are as investigative reporters, well, why don't you point out where it is where these men or women
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broke the law? >> guest: well, it's a two part thing here. if you look and you seriously look and you can't find any broken laws, which i very seriously doubt, we haven't had a real prosecutor since -- what's our friend's name in new york? morgan thaw. he was the recent real prosecutor. none since him. let's accept that argument, they didn't break any laws. the very next thing should be a whole legion of congressmen on the hill introducing legislation to make the conduct they engaged in criminal. that allowed the agents to take place. >> host: isn't that dodd-frank? >> guest: a little bit, a little bit. what are the other things because we wrote so much about taxes over the years. we long ago recommended stop criminalizing tax fraud.
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make it a draconian civil penalty. you want to, you know, not pay your taxes, and you want to ship your money overseas. fine. we will take all of it back. we, the government, and give you a median family income check for the year, and then you start over. that would be far more effective than putting someone in prison for six or seven months, and then they come out and all the money's still there. that makes no sense whatsoever. >> host: the republicans are critical of dodd-frank saying we should unshackle wall street, and that you are, in fact, creating uncertainty and pressures on big business, and they don't like it. >> guest: have they talked to sandy wild lately in terms of just that issue? i mean, i'm joking, but the fact is the guy who led very much for the eliminating the fire walls -- >> host: citi bank? >> guest: exactly. eliminate the fire wall between
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wall street and banks now says that is a terrible mistake. the argument there's too many regulations, and that's a common one you see among some of the political cognizants, just absolutely no basis for it. it was not regulations, multiple regulations that led to the collapse, but the fact there was little oversight. there was a mind set, a deregulation mind set in the financial services industry that created, in part, the mortgage catastrophe. what we saw in doing the book, spent time in a veteran's center in southwest florida, and everybody knows a lot of the current veterans, afghanistan, iraq, what they've come back to. what was interesting about the center is how many veterans went back to the korean war, vietnam, the gulf war of 15-20 years ago. a lot of the people were on the verge of losing their houses. one of the great myths out there was a social policy putting people in houses who shouldn't have been. yes, i'm sure there was some of
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that. here's guys who owned houses for years, many of them who had been tricked by exotic mortgages that mortgage companies were selling it because of the fees and what they could make from it. we remember when we bought our first houses. you had to mortgage your first born child to get a mortgage. in the last ten years, it was flipped because there was money made in fees and bundle them with stock instruments. was that regulation? no, this was not regulation at all. >> guest: wall street demanded more and more of the bundled mortgages because they had a market for them. >> host: are you saying that market dinism doesn't work for the american middle class anymore? >> guest: not the way it's been played out now because what kinds of jobs is this great american market creating? just as you mentioned a few minutes ago, i mean, some jobs created are not high paying jobs, many do not have benefits.
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we make the point in the book that the unemployment rate is terrible, but equally bad are many people who are working, who are now earning two-thirds of what they earned # three or four years ago, half of what they earned. >> host: the people responsible for this are the politics, but also the people who pay the politicians, and that is the 1%? >> guest: right, the 1%. >> host: the 1%. now, if this is the case, that that 1%, why is it that, again, we come back to this issue that, you know, so many people say, well, but they are the dynamic force in our economy? you can't -- you want to punish them for what they are doing, but you talk about mitt romney, and say, you know, it's not just mitt romney. there's a whole class of mitt romney out there who do this and who move jobs overseas when necessary. >> guest: uh-huh. >> host: some of the most, i think, emotionally powerful examples you offer, for example,
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one is about a rubber maid company, another about a company that makes grips, but one that has -- it's a vice like a lock -- if you tell those stories for the viewers here at c-span, that would be great. >> guest: the vice grip, all of us with apartment, houses, condos, whatever, almost everybody has the locking plyer because it was a magical invention 75-80 years ago. a danish immigrant in a tiny town in nebraska, typical of american innovation, came up with the idea that you could lock things in place leaving the other hand free to do other things. in a little town in the middle of nebraska, that instrument had been made decade after decade, refined, new products on it, provided solid, good jobs for people in that community, sent their kids to college if they wanted to go to college. these were not super high paying jobs, but solid, good jobs that
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were the heart of american ingenuity. eventually, a multinational corporation comes along, buys the company, and systematically shuts it down and ships the work to china. what's interesting about this, the chinese factory, after it went over there, was not efficient, and, n., it was apparently so poorly run that they, folks who were laid off back in nebraska, paid them to go over and try to study this situation to impose some efficiency on the chinese work force. >> host: but the company in nebraska, wiped out? >> guest: wiped out. it was there for decades, provided work for generations of people, and it actually employed more people than the town itself had population. it grew from a wide surrounding area. that was typical of the country. you found vice grip stories all over america. >> host: this was done by the hedge fund types, by the romney types in your opinion? >> guest: the wall street folks who decided we can make
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more money sending work offshore. >> host: no penalty from the politicians? >> guest: zero. >> guest: they brought the product back, essentially duty free. the fact that the chinese governments had gone out of their way to establish these industrial parks to provide the land, and in some cases, they actually rounded up the work forces for a lot of these factories. >> host: what happened with rubber maid? >> guest: well, very similar. i think everybody probably has a rubber maid product, more than one, but one or two in the refrigerator, the containers. the dust pans, you name it. rubbermaid in ohio. rubbermaid was with small town america, just like the nebraska story on vice grips. provided employment for decades. the exact same thing. >> guest: we make the
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appointment that rubbermaid story becomes a typical of how what is happening in the middle class in this country. we make the point, think of the civil war. if there was not a battle of getty sburgberg, just -- gettysberg, that's what happened to the middle class. there's no one event to point to. june 1979, we make the point that the u.s. was at the very height of its employment in manufacturing, total numbers of people. nobody paid attention to it because the number always went up. next month, it went down and proceeded to go down. it was 20 million back then, and now it's 10 million to 11 million. all of these, because of the policies we've been talking about. >> host: we talked about vice grips and rubbermaid, but an example of modern american ingenuity initiative innovations
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at a very successful level would be apple. >> guest: absolutely. >> host: you, in the book say, again, as a betrayal of the american middle class and betrayal of the american dream, look what happened to the american company that was so successful, they've gone overseas for their manufacturing. >> guest: they don't make a thing in this country. one of the greater examples we refer to is when jobs died, all of these illusions, he was in the class of the early day, the thomas edisons of the world. there was a difference. edison invented, manufactured, and kept the manufacturing here. his lightbulb was manufactured here until a few years ago. now it's not. >> guest: apple was here less than a scwen ration in terms of manufacturing. that was a departure from the
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way we did things for a long time in this country. creator like jobs comes up with this idea, designers help perfect the idea, and then you make it here and salesmen sell it. people buy it. there's a chain of events there, but in the case of apple, all of the manufacturing is basically eliminated in the country in less than a generation. we're not saying in the book he shouldn't have built a plant somewhere else. that's not the point. the fact that none were kept here is what is typical and so different. is it surprise in part that apple is such a rich company? they figured out ways to make more money. who paid the price here domestically because of that? that's the middle class. >> guest: another example that we talkedded about earlier, there's no stick. whoever the company is, if they want to move their prescription overseas, fine, but there's not to be a penalty so that at least
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the playing field is level for working people and middle class people. the playing field is totally out of whack now. >> guest: well -- >> host: you say there's the art that we just need more education to keep up with global competition. we need to do a better job, but you counter by saying education won't help. highly educated young people are paid less and leaving school with higher debt loads. >> guest: exactly. >> guest: we have the story in the book about, it's a sad story about a computer programmer who had the education, excellent grades, everywhere he worked, a fellow in southern california, got high marks, people referred him to as the programming guy. he had education, but under the new rules that let all of these things come back, let folks come in at lower salaries to be trained for the jobs, education -- we make the point in the book that education alone is not the answer. we're not against education, but
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unless that's accompanied by a more realistic trade policy, by better economic policy, that, alone, is not going to be the answer. >> host: because there's a shortage of jobs, and you believe the shortage of jobs is caused by policies put in place by politicians who favor the rich, multinationals and hedge funds taking money overseas, building overseas, and without a care about what's happening here at home for the middle class? >> guest: exactly. >> host: you point out in germany, japan, in india, those governments subsidize and help to grow industries and protect jobs of. the united states does not. >> guest: we're above that. >> host: all right. also in the book, you pick up a really big target of the left, the coch brothers. you beat them about the head too for supporting policies that are in their self-interest making
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themselves rich and economic think tanks, and that they put out a lot of -- i don't know if it's disinformation, tell me -- >> guest: that's what it is. >> host: they are putting out disinformation in order to con vinsz the american middle class to act against their best interests. >> guest: if you do that over and over and over, that's what happens. >> host: what do you mean? >> guest: say how wonderful policies are, and when it's -- >> host: we trade, low taxes on the risk, people keep profits overseas? >> guest: you hear that over and over and over, and pretty soon, people believe it. >> guest: one of the examples we cite in the book they engaged in, one of their non-profits, on the eve of the 2010 congressional elections, they began running ads that from the
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moment in canada, had a brain tumor, and you don't want a canadian style health care system in america. boy, if i went to the united states, i'd be dead today with my brain tumor. well, subsequent newspapering thes disclosed she went to the u.s., had a procedure, but the doctors involved said this was a notary -- non-life threatening condition. that's how the system works. if it is not life threatening, you are not waitedded on like you want. by the time that information got out, elections are held; and people looking at that, obamacare would be horrible because that's a canadian style system, and you will not get treated. that's misleading. >> host: you say the coch brothers also have been critical players in terms of using all of their think tanks and political politicians they support to a
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pose any increase in the minimum wage, which you say has not kept pace with inflation, again, damaging to the middle class, make it more difficulty to file for bankruptcy. you say that's damaging to women. >> guest: right. >> host: you also say these are the folks, the coch brothers and others like them, are in the drive that begins in 2013 that cuts into medicare, social security, the paul ryan type approach. >> guest: exactly. >> host: you see this as part of a grand conspiracy? >> guest: it's a grand plan because the thing we see in many of the wealthy, and not all, by the way, we need to emphasize that. warren buffet in a different position on this, but what we see is they do not like to pay taxes meaning they do not want any government programs of any sort. the less government you have, the fewer taxes you have. it's basically a very, very simple approach, just let the
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market work and everybody go about their business and so forth. what we're worried about is how influential the advertising will be. the coch's announced in the swing states they will pump in millions and millions of dollars. in pennsylvania, for example, the pitch is going to be portraying obama as just a disaster in terms of the deficit. now, you may not like obama. you may not like his programs. you may have a different way of looking at the way the country should run, but obama, as the creator of the deficit? i mean, he inherits this thing in 2008, the economy's in ruins, there's a decade there of running up the deficit, with the economy down, that means lower tax collections. i mean, he's contributed very little to the deficits in terms of the structural problems issue and the little he's tried to do like the modest stimulus, they were condemned by these people. the idea -- you may not like
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him, but the idea that he created the deficit is bogus. >> host: you know, the politicians, though, find that, in fact, there's money coming from the hedge fund folks. there's money coming from the coch brothers and big industrials. >> guest: exactly. >> host: they feel, i suspect, well, that's the pressure. that's the way the game is being played these days. you look right now at the fundraising, romney is out raising obama, and a lot of the wall street types, the business types, you know, president obama made us uncomfortable, attacked us. that's what's done in why book, if you're a rich person in the country, if you were the 1%, you'd feel attacked by the book. >> guest: well, i think those who do not want to pay taxes would feel that way, and those who do not like government involved in any aspect of the economy, they would definitely feel uncomfortable. i think the point we're saying
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is, you know, we're not advocating anything, especially radical or path breaking in this book. just saying turn things back a little bit the way they used to be, not even all the way by any means. go back a little bit. create the kind of balance we used to this in this economy where everybody could prosper and get ahead. >> host: what struck me deeply was talking about the end of pensions, and, again, you know, it's one of these thing, you people talk about where do the jobs go? i think, my, gosh, nobody has pensions anymore. they go into 401(k) programs, and the 401(k) programs don't have the profit, the earnings there to sustain people in the way that a pension did in the past. >> guest: right. >> host: the question is, well, how do you do away with pensions, and what you write in "betrayal of the american dream" is the politicians gave permission for a company to get out of pension obligations. >> guest: exactly. >> host: what happened?
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>> guest: same thing. it's what jimmy talked about. the politicians are just doing the bidding of the people who give them the money. >> host: in another story you tell that sticks with me is about arnold schwarzenegger, then the governor of california, and the bay bridge and the reconstruction and how, in fact, the bay bridge reconstruction is ultimately done by a chinese company, steel maker, i believe, but those jobs, those opportunities, the welding and all the rest is not done in in cr country, and then -- is not done in this country, and then you see schwarzenegger praising the workers, and not praising american workers for building the bridge, but praising chinese workers. >> guest: this is how short sided this is. the chinese got the contract because, quote, "they had the low bid" unquote. they get the low bid because if you don't pay workers anything, you can bid low. cost overruns, the final cost
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was about what the american companies bid. are there in the penalties for this? absolutely not. this comes back to the stick thing. if all we're going to do is hand out carrots to corporate america, and there's never a stick, and right now, there's no sticks, make no mistake about that, none. the end result will will be morf the same. >> guest: good point to make in terms of the bridge because it goes to the heart of the book and shows how politicians today are not caring about jobs in the country in any way. there was a consortium, an american consortium that could have built the bridge. is the industry what it was 30 years ago? no. partly because of public policies and the industry's own flaws. nobody disputes that. there's a group that could have put together the con shore shut up to provide the steel. interest in doing that? the answer to that was no. back in the depression, politicians were interested in
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creating jobs in this country. the original bay bridge was built solely with american zeal. at least part could have been done this way. this time, if there was a desire to do so, but there's not anymore. they want the chinese involved without any concern about the ramifications domestically. >> host: you mentioned a sign held up by someone involved with occupy wall street. >> guest: yeah. >> host: says i don't mind you being rich, i just mind you buying my government. is that the bottom line? do you think the rich bought the u.s. government? >> guest: no question about that. >> guest: they buy the government and public opinion. that's what we are -- it's not just the elected representatives. that's a huge part of it because that's the story in the past. now it's increasingly that and the advertising. the advertising that is very misleading in so many ways. it's ways in believing this is bad, this is good, when, in fact, that may not be the case.
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>> host: the occupy wall street movement is belittled by socialists, anarchists, rude kids. >> guest: it's hit a cord with americans. who among us does not know somebody who went to college, couldn't get a job afterwards, got good grades in college, now living at home? who among us who doesn't know a retired person who lost their pension living off their 401(k)? >> host: here's the thing, james, there are people out there upset about those things who don't blame the rich, but, in fact, say that the problem is government spends too much money, taxes too much, and has not unleashed the power of free enterprise. >> guest: we do not think that is the problem here. we think free enterprise, a lot of its -- it's been great for the country. nobody disputes that. it creates jobs, a lot of energy, done wonderful things. nobody disputes that. it's not been held back by
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government regulations. you can argue now that a tremendous amount of investment is going abroad to tap those middle classes in other countries when, in fact, more of that investment should be here, and that's why we make the point we think the government needs to make more of an investment now. this is a dire situation. this is a crisis. the greatest peacetime public works program in the country's history occurred on the watch of a republican president. dwight eisenhower. broad bipartisan support. >> host: and high tax rates. >> guest: this should not be a partisan issue. >> host: now, at the end of the book, you make suggestions, gentlemen, suggesting that we revise the tax code. you suggest there's real free trade in terms of imposing some protections here for american workers similar to what's used in china, japan, and elsewhere, and you say that there should be investments in u.s. infrastructure, a stimulus plan. could you two get legislated,
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dogcatcher? >> guest: probably not. but, you know, the problem with -- >> host: well, revising the tax code is popular. >> guest: polls indicate that people would go for it and think the wealthy should pay more. every poll indicates that. this gets back to who controls the government anymore? trade is more complicated issue, but, again, most of the polls indicate that the polls are too -- that they feel the government is not taking a forceful enough role there. >> guest: and this group at the top we talk about, they have been very successful in framing the debate, and so now the debate is all over the deficit, and we have to end the deficit tomorrow. >> host: austerity, austerity, austerity. >> guest: right. you know what? nobody talks about the trade deficit which we've had now, i don't know, 36-37 years.
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one year after another. that's the deficit that costs the jobs. you want to create jobs? end the trade deficit tomorrow and really crack down on that. people -- here's the news media's role in this. we always like to find kind of an analogy you can use, but if you go back, say, to 1980, and put this in terms of really hot chick back then, she weighs 110 pounds, 1980. today, she would way 2700 pounds following what happened with the trade deficit. that should be the visual image of everyone in this country of what the damage that has been done by protecting -- well, not protecting, but allowing other nations to dictate trade for us.
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that's what they do. they dictate it. >> host: unbelievable. well, this is why i think that there is so many people who are unsure about the future of the country, and, in fact, when you ask people is the country on the right track or the wrong track, overwhelmingly, they say the wrong track. >> guest: right. >> host: there becomes this polarized political divide that are you with the plutocrato or against them. republican, democrat, liberal, conservative. is this the wrong framework for addressing the problem? >> guest: we think it is. there's always two parties in the country. you're always going to have divisions about the way people, some people think there should be more government, some less. there's also -- but usually we were able, and in earlier times to very often come together during periods when things were rough, and right now, we gist think this whole thrust of which we think 1 the minority of the
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population to deal with deficit financing is the wrong way to go, and i'll never forget when we were doing the book, working on the book, i was in a veterans center in southwest florida, and one guy who was the service went back to the korean war, he was sitting at a desk watching a couple congressmen debate the issue from washington on deficit spending all calling for deficit reductions. the vain on his neck begin to pop out. he just got -- he just slammed the desk and said, "these people argue about things that are not the problem down here." what do they do about the people walking in here on the verge of losing their houses because of washington? it was not a case of more regulation was the problem. if there -- there was not enough input from washington to stop it. these are guys who are pretty much socially conservative. you know, i didn't consider one
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veteran in there what i think as ad ray call in any way, but here are people who have seen this up front and personal who thinks something really needs to be done, and they don't s anybody doing it. >> host: who should be doing it? >> guest: i think we make the appointment -- this is a case where we think the government does need to stimulate things in part. that's only part of it. change the tax code, stimulate investment, be a little bit more cognizant of what's happening with trade. the trade jobs now are way beyond blue collar. these are white collar jobs. the labor statistics did a study a couple years ago that the jobs are amazing, aeronautical engineers, biocemmists, pharmacists, high paying occupations they feel are now in danger of being offshored and everybody sitting around, not talking about it, is it right or wrong, what can be done about
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it? these are all educated people. >> host: the conclusion of your book is there's going to be a middle class in the country, but a smaller middle class. fewer points of entry to get into the middle class, and there's more concentration of wealth at the very top? >> guest: right. >> host: there's more poverty at the bottom. this is a different america that you see coming. do you see us becoming extremely divided by money? >> guest: right. >> host: you quote an ibm researcher, i believe, ralph, who says that global trade is good for these big corporations and the hedge funds, but it's bad for america. >> guest: right. it's not good for other, you know, we need to be careful here because when we talk kind of beating up on corporations, we're talking about the global corporations. the domestic u.s. corporations are being hammered because they get none of the benefits that
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the global companies do. they pay the real prices for it. >> host: why do they they their interests are with the hedge funds of the world? you hear often coming from the plutocrats and think tanks this is a war on small business. >> guest: exactly. they are framing the debate again. >> host: you think that's incorrect? >> guest: absolutely. >> guest: that's the truth. >> host: what's correct? >> guest: the immediate yom sized corporations are just being hammered, especially in taxes. >> host: so you're saying the owners of the medium sized corporations don't realize their own best interests? >> guest: well, some of them do. >> guest: yeah, some do. >> guest: in fact k on the whole debate of bringing the money back from offshore, the multinationals, $2 trillion in the swiss banks and so forth, the small businesses have organized and written letters to the congressmen and senators saying don't do this.
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don't let them bring this back. i mean, why should they get a break on their taxes when we're paying at a higher rate? some people do know what's going on, but it's like a lot of these things, i mean, others have been influenced by comments that we need more entrepreneurs in the country, we need to encourage innovation. there's been very little to discourage that in this country. i mean, the biggest problem is we're not thinking bigger in terms of what these good paying jobs should be. it can't all be left to the private sector. i think that's the big difference we have with that line of thinking. there is a role of public policy, always has been a role of public policy. i mean, how were railroads built in the country? materialize overnight? no, they were given land and insentives and all kinds of things. there's a role for that. that's what we're saying. not to suffocate this, but to work with it and have a

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